Decarbonisation pathways: Research, policy and practice
Dylan McConnell
Senior Research Associate
University of NSW
Presentation title: AEMA 2.0? Governance of the energy transition
Abstract: The National Electricity Market (NEM)and its institutional arrangements have previously been held up as a successful example of micro-economic reform. These arrangements and the associated frameworks are however now fraying,with States increasingly diverging from a nationally consistent approach. While the energy transition has been continuing at pace, a successful continuation of could be challenged or slowed by outdated electricity market frameworks. To ensure the transition is not derailed, it is critical to consider whether the regulatory systems surrounding electricity provision are still fit for purpose, and what reforms might be necessary to ensure appropriate governance of the energy transition.
The existing NEM governance framework is relatively complex. Historically, three key national institutions (AEMO, AER and the AEMC) shared responsibilities under the oversight of a ministerial council composed of all national and federal energy ministers. These institutions formed part of was a nationally consistent framework,codified in the Australian Energy Market Agreement (AEMA). The original institutions had clearly defined roles and responsibilities,and the strict separation of powers between rule maker, regulator and market operator. In recent years, States across the NEM have increasingly derogated away from this nationally consistent framework. This includes the Electricity Infrastructure Investment Act in NSW, which allows the state to override NEM rules under certain conditions. Similarly,the National Electricity Victoria Act(NEVA legislation)allows the Victorian state government to fast-track transmission projects outside of the NEM framework.
Simultaneously, the roles of the market institutions have evolved, with the market operator playing a larger role in policy and market development, and a new body added (the Energy Security Board), blurring the previously separated roles and responsibilities. The market operator is also playing a much more direct role in the planning of the system, through the Integrated System Plan (ISP). This role has the potential to be significantly expanded, with the Federal energy minister advocating for a “supercharged”ISP, and all ministers agreeing to develop more detailed integrated energy infrastructure and regional planning scenarios.
With the blurring and evolution of roles, and increasing unilateral action from State governments, there is a clear need to clarify or reform market arrangements to ensure a smooth and just energy transition. This presentation draws out some of the key considerations, issues and forks in the road for governing the energy transition, and the potential need fora renewed Australian Energy Market Agreement.
Chell Lyons
Sir Roland Wilson PhD scholar
Australian National University
Presentation title: In the vault: the roles of green banks in accelerating investment in the net zero transition. Case studies of Australia, New Zealand, and the United States
Abstract: Decarbonising the global economy requires a significant increase in funding for low-carbon, climate resilient infrastructure. It is widely recognised that current levels of investment are insufficient and need to scale up rapidly to meet the temperature goals of the Paris Agreement. Private sector funding shortfalls are particularly acute and using public institutions to leverage additional private finance into these investments is expected to be a key area of importance in making a successful transition to net zero emissions. One mechanism by which private investment can be “crowded in” is through green investment banks, a new form of institution that has emerged over the past decade. Green Banks provide concessional debt or equity financing to private companies which are unable to secure commercial funding, either due to the newness of technology or the limited availability of prior data on which to base risk analyses and other investment considerations. To date, the academic literature on Green Banks has been limited (Geddes et al., 2020, 2018; Schub, 2015). Adopting a qualitative, case study approach using expert interviews to elicit how four public Green Banks are seeking to overcome investment barriers and catalyse investment in the transition to net zero emissions. Australia's Clean Energy Finance Corporation (CEFC), the New York Green Bank (NYGB), the Montgomery County Green Bank (MCGB) and New Zealand Green Investment Finance (NZGIF) are at different stages of the investment cycle, but each is working to overcome a range of barriers to accelerate the investment transition to net zero in their respective jurisdictions.
References
Kreibiehl, S., Yong Jung, T., Battiston, S., Carvajal, P.E., Clapp, C., Dasgupta, D., Dube, N., Jachnik, R., Morita, N., Samargandi, N., Williams, M., 2022. Investment and finance in IPCC, 2022: Climate Change 2022:Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. IPCC.
Geddes, A., Schmid, N., Schmidt, T.S., Steffen, B., 2020. The politics of climate finance: Consensus and partisanship in designing green state investment banks in the United Kingdom and Australia. ENERGY RESEARCH & SOCIAL SCIENCE. https://doi.org/10.1016/j.erss.2020.101583
Geddes, A., Schmidt, T.S., Steffen, B., 2018. The multiple roles of state investment banks in low-carbon energy finance: An analysis of Australia, the UK and Germany. Energy Policy 115, 158–170. https://doi.org/10.1016/j.enpol.2018.01.009
Schub, J., 2015. Green Banks: Growing Clean Energy Markets by Leveraging Private Investment with Public Financing. The Journal of Structured Finance 21, 26–35. https://doi.org/10.3905/jsf.2015.21.3.026
Alexandr Akimov
Associate Professor in Banking and Finance
Griffith University
Presentation title: Are Australian regulatory & policy frameworks ready for a DER-led energy transition?
Abstract: Electricity markets are facing innovation disruptions at levels never seen before. One of the major drivers is the introduction of distributed energy resources or DER (mainly, rooftop solar). It has put into question old regulatory practices and brought challenges to system operations. In this context, this article contributes with a comprehensive investigation on policy options for Australia in two ways. First, we examine recent and proposed reforms. Second, we identify gaps in Australian regulatory systems that may present serious implications in the future, informing policymaking, regulators and market design.
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Dani Alexander
Research Director
Institute for Sustainable Futures, UTS
Presentation title: Towards a customer-centred clean energy transition - The first two years of RACE for 2030 CRC
Abstract: This presentation will provide an overview of major research projects that have been initiated to date and the plans for RACE for 2030 in the future. We are ramping up our operations and are seeking interest for several large research projects and our forward strategy.